Aid Recipients Face Battle for Limited Jobs

As California’s historic welfare redesign races forward, reformers face daunting challenges to their announced goal of putting to work as many as 700,000 aid recipients, records and interviews show.

Despite a surge of economic growth that is creating about 350,000 jobs annually, competition will remain fierce in the next three years, according to state employment projections.

In the job market, welfare recipients will be pitted against more than 1 million unemployed people and many thousands of graduating students, immigrants and other newcomers to the work force.

And, in this climate of scarce jobs, today’s aid recipients’ are at a stunning disadvantage in education and work experience, a Times analysis of U.S. Census records found. The vast majority have no work experience and half have no high school diploma.

Such deficiencies, employers say, would make welfare recipients less attractive job candidates than unemployed people who have proven skills and track records.

To help level the playing field, the state Legislature is considering tax breaks and other incentives for employers--as well as job training, child care and other support that would enhance the chances of welfare recipients landing and keeping jobs.

Although high turnover in many entry-level jobs will make it easier to find work, economists say there still will not be enough positions for everyone. This has prompted Democrats to argue that government needs to subsidize employment for welfare recipients who cannot find work.

The Wilson administration rejects such job programs as ineffective, and insists that the state’s economy can accommodate most of the welfare recipients and still generate enough jobs to lower unemployment to an ideal 5.5%, or about 800,000 people.

“Our goal would be to have all those people [on welfare] working,” said H.D. Palmer, assistant director of the Finance Department.

California is being forced into these tough choices by the federal welfare reform bill signed into law by President Clinton last summer. The law sets annual deadlines for welfare recipients to be put to work and provides a lifetime limit of five years on public assistance.

A battle over California’s welfare plan is expected to play out by the end of June in the Legislature.

Gov. Pete Wilson has proposed that new recipients can spend only 12 months on aid in a two-year period and that existing recipients can spend a maximum of two years in a three-year period--requirements that would push hundreds of thousands into the labor pool by the end of 1999.

Democratic leaders contend that Wilson’s timetable is too harsh and that public jobs will be needed to pick up the slack when recipients lose their benefits.

Complicating the welfare-to-work effort, records show, is a mismatch: Many of the fastest-growing occupations are far from the centers of poverty or require more skill than most welfare recipients have.

Economists also warn that once recipients find jobs, they will need significant hand-holding to ensure they do not drift back to the ranks of the destitute.

According to census data, the majority of welfare workers will at best qualify for entry-level jobs that are low-paying and most often part time or temporary. Such jobs sometimes carry no fringe benefits, leaving employees vulnerable to illness and small crises such as car trouble. And if the state’s economy should stall, they would probably be the first let go, social scientists said.

“Come the next recession--and it will probably come sooner than later--then the job availability problem becomes very acute,” said Rebecca Blank, director of the Joint Center for Poverty Research of Northwestern University and the University of Chicago.

Economic Climate Is Right

Despite such doubts, most economists say conditions today are more conducive for welfare reform than at any time in the past 20 years.

“It’s better to be done now, in this kind of economic climate where we’re generating lots of new jobs than in the depths of our downturn,” said Tom Lieser, associate director of the UCLA Business Forecast Project.

With the high annual rate of turnover in entry-level jobs--estimated to be 300% at some fast-food restaurants and hotels--most economists acknowledge that in theory there will be work opportunities for everyone on welfare, at least temporarily.

Bolstering the hopes of welfare reformers are the results of some experimental welfare-to-work programs around the country. Wisconsin has reported a 50% reduction in welfare rolls, driven largely by a more stringent timetable and work-training requirements. And Oregon has reduced its welfare caseload 37% with a program that turns over six months of assistance checks to employers who hire aid recipients.

California’s Greater Avenues to Independence, or GAIN, program has put tens of thousands of welfare recipients to work showing that “the best welfare-to-work programs generate significant changes,” according to a study by Manpower Demonstration Research Corp. of New York.

The programs in California and elsewhere are operating on a relatively modest scale, compared to the task facing the state.

Deadlines for Work

Federal deadlines require the state to put half of its estimated 670,000 adult recipients of Aid to Families With Dependent Children to work by 2002.

While advocates for the poor have criticized the federal timetable, the Wilson administration is seeking to accelerate the pace. The governor’s proposal would require the adult recipients to get jobs or be involved in work-related activities, such as job training, by the end of 1998 and would cut off their benefits entirely a year later. They would have to wait a year before reapplying for benefits.

Anyone applying after Jan. 1 of 1998 would only be able to receive one year at a time.

Dozens of welfare bills introduced in the Legislature are being hashed out by a special conference committee on which Democrats hold a substantial majority. The committee is trying to come up with a composite bill to present to the Legislature and Wilson this summer.

State Sen. John Vasconcellos (D-Santa Clara), chairman of the committee’s jobs creation task force, has outlined an eight-point program that would include economic incentives to businesses, training to help low-level workers move up to better jobs, placements in nonprofit organizations and, as a last resort, public service jobs.

Still, Vasconcellos said he is not sure that the state will be able to ensure a living wage for everyone who is now on welfare. “It’s mammoth,” he said of the task. “I just don’t know.”

Are There Enough Jobs?

Private and state economists generally forecast that an average of about 350,000 jobs will be created annually through the end of the century, gradually tapering off from a peak last year. Thus more than a million jobs will be added, assuming the economy stays hot.

The welfare recipients will be competing for those jobs not only against the unemployed but also against new workers who will graduate from school or migrate into the state each year. State economists project the number of new workers at 290,000 per year.

This means that up to 2.6 million people could be vying for about 1.1 million jobs over the next three years.

Various factors are expected to narrow the gap and result in an acceptable level of unemployment, according to state officials. Among them:

* About 90,000 adult aid recipients may be exempted from the work requirement for reasons such as disability and will not lose their benefits.

* In another 114,000 households, someone already is working and the loss of benefits will not necessarily prompt another household member to seek work.

* Historically, the median stay on welfare is 26 months, meaning half of aid recipients voluntarily move off welfare in slightly more than two years.

“It’s not going to take much more growth in the California economy than we are now projecting to absorb all these people,” said Bruce Smith, principal economist for the state Department of Finance.

But critics argue that those numbers still don’t eliminate the job shortage. “Where their analysis leads you is we’re going to be playing musical chairs,” said Jean Ross, executive director of the California Budget Project, a nonprofit public interest group. “[Some] employed people become unemployed and go on welfare.”

Another theory holds that the market would quickly absorb the flood of welfare recipients but drive down the wages of the working poor.

“Employers will discover they can hire these unskilled workers for less then they could have before, and they will find new ways to use these unskilled workers,” said labor economist Gary Burtless of the Brookings Institution, a Washington think tank. “Wages will decline.”

Even in today’s robust economy, most welfare recipients fall at the bottom of the available work force in employability, according to government data and interviews with employers.

In the entry-level market dominated by service jobs in the hotel and restaurant trades, employers look for a high school diploma, personal stability and a recent employment history.

But a profile of the welfare population derived from the U.S. Census Bureau’s 1996 population survey shows that the majority of the 572,000 recipients it counted fall short of those minimum requirements. Half of welfare recipients are high school dropouts and 82% have never held a job.

More than two out of three are single parents, mostly women. More than half said they are not looking for work because they are tied to home or family--a worrisome sign for employers who want workers who can focus on their jobs.

In contrast, the unemployed appear far more job-ready. They are mostly married males. Three-quarters of them have job experience, and two-thirds have high school diplomas. Only 4% were out of work because they had to care for home or family.

Welfare recipients who have been out of work for long periods do not often meet minimum standards for employment, said Fred N. Hallett, a senior vice president with San Diego-based National Steel and Shipbuilding, which regularly recruits from welfare rolls.

“You can’t make a sword out of soft steel,” Hallett said. “Unfortunately, the same goes for people who have been on welfare for years or generations. They might not have the discipline to work every day. . . . If they’re just going to say ‘I can’t make it today,’ then we probably can’t use that person.”

Mismatched Opportunities

When economists look into the future, they see great opportunity for the skilled and highly skilled.

To assess how many of the new jobs welfare recipients might get, The Times matched state job growth projections with the U.S. Bureau of Labor Statistics index of educational requirements. Four out of five new jobs will require at least a high school diploma or moderate-to-long-term training, the analysis showed. And one out of four will require a minimum two years of college.

That means most welfare workers will be eligible for only a small percentage of the new jobs.

There is also a decided imbalance between where welfare recipients live--urban centers such as Los Angeles and hard-hit rural regions such as San Joaquin County--and where the jobs are being created--in places such as Orange County and Silicon Valley.

State forecasts show that a few counties will have more jobs than workers, while most will be short of jobs.

“Typically, you’d assume some mobility on the part of the [jobless person] or some receptiveness among employers to facilitate transfers,” Lieser said.

But the principle may not apply so readily to a welfare population, lacking both transportation and employment savvy, he said.

Employers Wary

Wilson has sought advice from a group of business people, led by executives at Pacific Telesis Group and Arco, on how to make the hiring of welfare recipients more palatable. So far, though, rank-and-file employers are responding tentatively.

Some have gone to great lengths and achieved remarkable successes in shaping high-risk hires into valued employees. But many express reservations.

“There’s a huge expectation on the part of government that private industry will pick up the ball on this,” said Nicholas King, owner of a small San Diego manufacturing plant that hires welfare recipients.

“But a business isn’t going to create a job unless there’s a benefit to the company,” King said.

A survey of 800 business owners by the California Chamber of Commerce found that nearly two-thirds would demand protection from employment termination lawsuits prior to hiring people off of welfare rolls. Half said they would demand tax credits or other economic incentives to hire recipients.

Many of the nation’s largest employers have no special plan to absorb welfare recipients, according to a recent Associated Press survey. Only eight of 100 companies surveyed have programs designed to move welfare recipients into the work force. Another 16 are considering them.

But the others say hiring is driven by economic realities rather than social programs, and the most qualified will get the jobs.

Models for Success

Intensive job preparation and a strategy stressing that the lowliest job is better than no job have fueled the successes of California’s GAIN program.

Its placements in Los Angeles topped 32,000 last year. In Orange County, 10,000 are expected this year, a four-fold increase from earlier in the decade. Similarly, Riverside County placements have than doubled to nearly 12,000.

Meanwhile, some private companies are taking similar steps on their own.

As kitchen workers at the Los Angeles Airport Marriott ready hundreds of lunches for hungry conventioneers, Jeffrey Richardson doesn’t look the part of soldier in the welfare reform battle. But the 43-year-old Compton resident shows what can be done.

A painter by trade, but out of work for the last five years, Richardson began looking for work again just over a year ago, after drug treatment.

His spotty record scared some potential employers, but Richardson credits his new kitchen job to “Pathways to Independence,” a Marriott welfare-to-work training program which taught him basic skills.

“You can’t just take people off of welfare and throw them into jobs,” said Andrea Wagner, a Jewish Vocational Services worker who screens potential candidates for Marriott’s program. “In many cases, you need to teach them life skills--how to get up on time, how to speak, how to dress, the fact that you bathe before interviews.”

Social scientists contend that the real challenge for government and business is two-fold: to get welfare workers their first job and then to stick with them until they can parlay that into stable employment with a salary to support an independent family.

On a limited scale, this is being done by many smaller companies as well as large ones such as Pep Boys, which has hired 125 welfare recipients and unemployed people in recent months to staff stores opening in Los Angeles County.

But only a handful of companies, including Packard Bell NEC, have had any real experience with hiring large numbers of welfare recipients.

At Packard Bell NEC’s Sacramento plant, a third of the 4,000 assembly jobs were filled by unemployed workers and welfare recipients when the plant opened in 1995, said Bill Warwick, employment director.

More than 60% of the initial hires remain and most have received raises. Absenteeism and worker’s compensation claims are about equal to Packard Bell NEC’s experience prior to moving the plant out of Los Angeles in 1995.

Warwick credits welfare workers with helping sift through applicants. “We were looking for good social skills, dependability, teamwork and enthusiasm,” Warwick said. “Many of these were entry-level jobs so we needed [only] a minimal amount of technical skills.”

Times staff writer Dave Lesher and data analyst Sandra Poindexter contributed to this story.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Job Competitors

California welfare recipients forced to seek jobs will be competing with unemployed workers who are more numerous and better prepared to return to work. As a group, these unemployed workers are better educated, have a much better employment record and are much less likely to be single parents, census data show.

Who Are They?

Number of People*

Welfare: 572,000

Unemployed: 1,037,000

* Ages 18-64

*

Household Type

Married

Welfare: 31%

Unemployed: 77%

*

Unmarried

Welfare: 69%

Unemployed: 23%

*

Gender

Male

Welfare: 19%

Unemployed: 68%

*

Female

Welfare: 81%

Unemployed: 32%

*

Ethnicity

Asian

Welfare: 13%

Unemployed: 8%

*

Black

Welfare: 19%

Unemployed: 10%

*

Latino

Welfare: 41%

Unemployed:38%

*

White

Welfare: 26%

Unemployed: 43%

*

Age Groups

18 to 29

Welfare: 41%

Unemployed: 42%

*

30 to 49

Welfare: 53%

Unemployed: 43%

*

50 to 64

Welfare: 6%

Unemployed: 15%

*

Education

Less than high school diploma

Welfare: 50%

Unemployed: 32%

*

High school diploma or some college

Welfare: 44%

Unemployed: 56%

*

College graduate or post graduate

Welfare: 6%

Unemployed: 12%

*

Citizenship

Native citizen

Welfare: 57%

Unemployed: 64%

*

Naturalized citizen

Welfare: 4%

Unemployed: 6%

*

Noncitizen

Welfare: 39%

Unemployed: 30%

Work History

TYPE OF WORK

Never worked

Welfare: 82%

Unemployed: 27%

*

White-collar jobs

Welfare: 6%

Unemployed: 24%

*

Service industry jobs

Welfare: 4%

Unemployed: 10%

*

Blue-collar jobs

Welfare: 8%

Unemployed: 39%

*

REASON FOR NOT SEEKING WORK

Ill or disabled

Welfare: 6%

Unemployed: 2%

*

Homemaking

Welfare: 53%

Unemployed: 4%

*

Going to school

Welfare: 13%

Unemployed: 5%

*

Could not find work

Welfare: 9%

Unemployed: 12%

*

WHY NOT EMPLOYED

Not in labor force

Welfare: 80%

Unemployed: 0%

*

Lost job or laidoff

Welfare: 7%

Unemployed: 55%

*

Left job

Welfare: 0%

Unemployed: 9%

*

Reentering labor force

Welfare: 12%

Unemployed: 28%

*

New to labor force

Welfare: 1%

Unemployed: 8%

*

WORKED IN PREVIOUS YEAR

Welfare: 18%

Unemployed: 73%

Source: Census Bureau’s March 1996 Current Population Survey;

Compiled by Richard O’Reilly, Times director of computer analysis, and Sandra Poindexter, data analyst

Geographical Mismatch

The challenge of finding jobs for adult welfare recipients is exacerbated by the uneven distribution of new jobs and those who will need them. The chart below, comparing the state’s five most-populous counties, shows that Orange and Santa Clara counties have more jobs than welfare recipients, but Los Angeles and San Bernardino counties do not have enough excess jobs.

Los Angeles County

Welfare Recipients: 198,717

Unemployed: 322,981

Annual Projected Job Openings: 164,310

Source: California Employment Development Department, March estimates